Contract analysis

I. Introduction and Overview The purpose of this memorandum is to provide a comprehensive summary of the outcomes and action items resulting from the in-person negotiation session held on Friday, June 9, 2023, between representatives of Penterra Pharmaceuticals Corp. ("Penterra" or "Sponsor") and its outside counsel, Calderwood & Harkness LLP ("C&H"), on the one hand, and Veridian Health Research Network, Inc. ("Veri

II. Issues Resolved at the Session A. Clinical Trial Liability Insurance Requirements (RESOLVED) Background and Prior Positions. The question of clinical trial liability insurance requirements had been a significant point of contention since WJC's first markup. In their initial response and again in the June 2 second markup, Veridian took the position that Penterra should be required to maintain clinical trial liabil

1. Sponsor Clinical Trial Liability Insurance. Penterra shall maintain clinical trial liability insurance with minimum coverage levels of $25,000,000 per occurrence and $75,000,000 in the aggregate for the duration of the MCTA and for a period of three (3) years following study completion or termination, consistent with the existing Briarcliff Mutual policy.

2. Subject-Injury Sublimit. Penterra shall maintain a subject-injury sublimit of $10,000,000 per occurrence and $50,000,000 in the aggregate under the Briarcliff policy. This sublimit is specific to claims arising from adverse events, injuries, or deaths directly attributable to the administration of the investigational product (PPC-4871) or study-related procedures.

3. Additional Insured Endorsement. Veridian and each participating Veridian Network site shall be named as additional insureds under the Briarcliff policy with respect to claims arising out of the CLARION trial. Karen Tremblay, Vice President, Life Sciences Lines, at Briarcliff Mutual, had previously confirmed to C&H in a May 22, 2023 telephone conversation that Briarcliff has the capacity and willingness to issue an

4. Veridian and Site Coverage. Veridian and each participating Veridian Network site shall maintain general liability insurance and professional liability (medical malpractice) insurance with minimum coverage levels of $5,000,000 per occurrence and $10,000,000 in the aggregate for the duration of the MCTA and for a period of three (3) years following study completion or termination.

5. Certificate of Insurance Exchange. The parties shall exchange certificates of insurance within fifteen (15) business days of MCTA execution and annually thereafter for the duration of the agreement and any applicable tail coverage period. Each party shall provide the other with at least thirty (30) days' prior written notice of any material change in, cancellation of, or failure to renew any required insurance cov

1. Right to Publish. Investigators affiliated with Veridian Network sites shall have the right to publish the results of the CLARION trial, including single-site results and multi-center results, subject to the review process described below.

2. Sponsor Review Period. Prior to submitting any proposed manuscript, abstract, poster, presentation, or other publication (collectively, "Publication Materials") to any journal, conference, or other forum, the investigator shall submit the proposed Publication Materials to Penterra at least sixty (60) days prior to the planned submission date. During this sixty-day review period, Penterra shall have the right to re

3. Patent Protection Delay. If Penterra identifies patentable subject matter in the proposed Publication Materials and determines, in its reasonable judgment, that the filing of a patent application is necessary to protect such subject matter, Penterra may request an additional delay of up to ninety (90) days beyond the initial sixty-day review period (for a total maximum delay of one hundred fifty (150) days from th

4. Limitation on Sponsor Review Rights. Penterra may not suppress publication or require the removal of scientific findings, conclusions, or data from any Publication Materials. Penterra's review right is limited to (a) redaction or modification of confidential information (e.g., proprietary formulation details, manufacturing processes, or non-public business information), and (b) temporary delay of publication to pe

5. Multi-Center Publication Coordination. Multi-center publications involving data pooled from multiple Veridian Network sites shall be coordinated through the Global Principal Investigator, Dr. Catherine Aldridge, M.D., Ph.D., of Graystone University Medical Center, to prevent premature disclosure of pooled results that could compromise the integrity of the overall trial or interfere with Penterra's regulatory submi

6. Documentation. This publication rights framework shall be reflected in Exhibit G (Intellectual Property and Publication Rights) of the MCTA and in the IP Side Letter to be executed concurrently with the MCTA. Allison Whitmore confirmed during the session that Dr. Lena Marchetti, Senior Vice President, Research Administration, Veridian Health Research Network, had pre-approved this compromise and that Veridian woul

III. Issues Remaining Open Two issues remain open following the June 9 session. Both relate to the termination provisions of the MCTA. While the parties were unable to reach full agreement on these issues during the session, the discussion substantially narrowed the areas of disagreement, and we believe that resolution can be achieved through the drafting process and targeted follow-up discussions described below. A.

1. Sean Morrissey (C&H) and David Kesselman (WJC) shall exchange revised termination wind-down payment provisions by June 14, 2023. The revised provisions should reflect the areas of agreement (earned but unpaid fees, prorated maintenance fees, non-refundable start-up fees) and present compromise language on the wind-down fee mechanism.

2. Jennifer Holt (VP, Clinical Operations, Penterra) shall provide an estimate of actual wind-down costs per subject, based on Penterra's experience in prior clinical trials, by June 13, 2023. This estimate will be critical to informing Penterra's negotiating position and demonstrating to Veridian that a fixed per-subject fee plus documented costs is a fair and reasonable approach.

3. If the associates are unable to reach alignment through the drafting exchange, Miriam Calloway (C&H) and Allison Whitmore (WJC) will hold a partner-level call on June 15, 2023 to attempt to resolve the remaining differences. B. Termination for Regulatory Action / Clinical Hold (OPEN) Background. The parties discussed but were unable to resolve the specific rights and obligations that would apply in the event that

1. Christopher Aiken (C&H) shall contact Dr. Priya Sundaram, regulatory counsel at Castleton & Hargrove LLP, by June 13, 2023 to obtain guidance on typical clinical hold resolution timelines in oncology IND programs. This information will be critical to determining whether a 90-day or 180-day period (or some intermediate period) is a reasonable timeframe for resolving a clinical hold before a termination right is tri

2. Sean Morrissey (C&H) shall prepare revised regulatory termination / clinical hold provisions for inclusion in the near-final draft of the MCTA by June 14, 2023, incorporating Dr. Sundaram's guidance and proposing a compromise position.

3. The revised provisions will be shared with WJC as part of the near-final draft circulation on June 16, 2023, with the expectation that Veridian will provide comments by June 21, 2023.

IV. Other Items Discussed In addition to the six major open issues addressed in Sections II and III above, the parties discussed and confirmed the status of a number of other provisions of the MCTA. Each of the items below is either fully agreed or requires only minor conforming edits in the near-final draft. A. Fair Market Value / Anti-Kickback Compliance The parties engaged in a brief but important discussion confi

1. Governing Law: The MCTA shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws principles.

2. Three-Tier Dispute Resolution: Tier 1 — Designated Representative Negotiation: The parties shall first attempt to resolve any dispute through good-faith negotiations between designated senior representatives of each party for a period of thirty (30) days following written notice of the dispute. Tier 2 — Mediation: If the dispute is not resolved through Tier 1 negotiations, the parties shall submit the dispute to m

3. Injunctive Relief: Notwithstanding the foregoing, either party may seek temporary restraining orders, preliminary injunctions, or other injunctive or equitable relief in state or federal courts located in New York County, New York, to preserve the status quo or prevent irreparable harm pending resolution of a dispute through the three-tier process described above. No changes to the dispute resolution provisions ar

V. Revised Timeline to Execution Based on the progress achieved at the June 9 session and the action items identified for the remaining open issues, the parties have agreed on the following revised timeline for completion and execution of the MCTA: This timeline is aggressive but achievable, provided that all parties adhere to the deadlines set forth above and that the remaining open termination issues can be resolve

VI. Action Items Summary Table The following table consolidates all action items arising from the June 9 session, including responsible parties and deadlines: We ask that each responsible party confirm receipt of this memorandum and their acceptance of the assigned action items and deadlines at your earliest convenience.

VII. Conclusion The June 9, 2023 in-person negotiation session was productive and substantially advanced the MCTA toward execution. The resolution of four of six major open issues — clinical trial liability insurance requirements, investigator publication rights, the medically necessary protocol deviation liability framework, and confirmation of the subject-injury indemnification caps — represents significant progres